Every industry needs to reinvent itself every few years to meet the demands and expectations of new generations of customers.
The jewelry industry is no exception.
The business models and marketing strategies followed by jewelry companies have radically evolved in recent years, just like the market behavior of new generations of customers.
Some companies, like Pandora, have been able to adapt to these changes and understand new and exciting patterns in the market.
As a result, Pandora has been able to create a strong market position for itself and has been able to gain a competitive advantage over many, more established, jewelry brands.
In this post, we’re going to discuss this evolution in jewelry marketing and delve into the new insights that Pandora was able to draw from a new generation of consumers.
The Old Approach to Jewelry Marketing: De Beers Diamonds
Traditionally, the marketing strategies adopted by jewelry companies followed the footsteps of De Beers diamonds.
De Beers was able to influence the market and connect the purchase of diamonds to probably, the most important day of people’s life: their marriage.
Let’s see how we can run a marketing analysis of the go-to-market strategy championed by De Beers.
- First of all, diamonds are not scarce, they are overly abundant. De Beers, however, was able to limit their supply, by controlling some of its extraction locations, creating artificial scarcity, which increased their sense of exclusivity and their price.
- Secondly, De Beers developed a broad set of associations between the diamonds and their social and emotional value. These gemstones were portrayed as the perfect stone for wedding rings. The social value of diamonds was connected to wealth and affluence and the emotional significance of a diamond ring was connected to its heritage and heirloom, as it was passed on from generation to generation.
- Thirdly, De Beers connected the purchase of diamonds to affluent couples or even price-sensitive customers, by linking its purchase to the “happiest day of their lives”. Such was the importance of the occasion that customers could save up in order to afford a diamond worth 3 months salary.
This strategy was simple but genius.
As a result, De Beers became a very successful jewelry brand and one of the most famous diamond dealers in the world.
But does this approach still hold?
It’s hard to say. Jewelry customers have changed drastically since the 1950s and now diamonds are used in very different ways.
The demographic segmentation, as well as the behavioral patterns that are connected to diamond and jewelry purchasing, have evolved and now consumers are starting to look at jewelry from a completely different perspective.
Pandora was one of the jewelry brands that was able to sense this change early and develop a strategy that would impact the whole industry.
How Pandora Understood the New Jewellery Market
Pandora was able to conduct research on new generations of consumers and realized that old patterns based on aspirational ownership of luxury products would not hold in today’s market.
Here are some of their insights:
New generations of consumers are responsive to quick gratification, so jewelry had to be more accessible and inexpensive, as it’s unlikely anyone would invest the time to save up to buy. On the contrary, if the price was more reasonable, impulsive buying may have been a much stronger instinct to buy.
Modern women do not wait around for men to propose or to give them a jewel. Nowadays, it is very common to self-gift a product without any particular occasion. Jewelry companies don’t have to always suggest a specific occasion to buy, it can be for the simple pleasure of indulging in self-reward.
Relationships are more unstructured
People do not have the same conventional sentimental relationships – which were the standard in the mid of the 20th century.
Relationships are now much more fluid and nuanced. As a result, we don’t have any need for a ring that represents our one-and-only love, but on the contrary, we need a much broader “vocabulary” of jewelry to express many more degrees of affection that can range widely from friendship to love.
Building on these insights Pandora developed a product collection that was fully able to align with these new trends.
We’ll discuss this in the next section of our post.
How Pandora Evolved to Meet New Customer Demands
So how does Pandora’s product collection reflect these new market insights?
Let’s look at some of their marketing mix strategies, to see how they are able to match new demands in consumer markets.
Accessible Pricing: Online Retail and Ongoing Promotions
In order to make the product accessible, but still desirable jewels are mostly in silver, to maintain high-profit margins despite the lower sale price in comparison to traditional jewelry.
Moreover, the online distribution format allows Pandora to take advantage of promotions and discounts which can be used to provide a sense of urgency to increase sales.
Self Gifting: Pandora Me Collection
Certain divisions of the product collections have been branded so as to clearly connect with customers’ self-gifting habits, as in the case of the Pandora Me collection.
By developing a collection division fully devoted to this occasion of use, the brand is endorsing and broadening the habit of self-gifting to all of its potential customers.
Broader Occasions of Use. From Charms to Masstige Luxury
By developing “charms” focused on nuanced feelings or a special occasion of use the brand is making sure its collection can embody a much broader variety of messages and meanings so that customers can use Pandora’s jewelry as a very inclusive language capable of fitting any possible occasion of use.
Great, now that we’ve covered all the bases, let’s move on and draw our conclusive remarks.
As we’ve discussed in the post, the jewelry market has come a long way since the era of the diamond ring proposal.
Companies like Pandora were able to sense this market evolution and tackle an opportunity to transform a moment of uncertainty and change into a competitive advantage.
By delving deep into customers’ motivations and expectations using Clayton Christensen’s Jobs to Be Done Theory the brand understood how it could shape its product offer to meet the demands and expectations of a new generation of customers who simply did not share the same values and habits of their parents and grandparents.
Pandora was able to set a great example of how a company can take advantage of these moments of change and uncertainty and build for itself a great positioning opportunity to serve its customers better than its competitors.
Pandora is not alone, there are other brands in the fashion and lifestyle industry that were able to understand and leverage customers’ behavior to develop marketing strategies that made them internationally successful. Giorgio Armani is certainly an example of this approach, and we discuss his strategy in more detail in this post.
If you’d like to read up more about branding and marketing strategies in the fashion industry, then go ahead and visit our blog where you’ll be able to find a wealth of information on fashion business and marketing in the creative industries.